BEIJING (Reuters) - The value of overseas assets held by China's centrally owned enterprises has exceeded 6 trillion yuan ($906.34 billion), with investments in more than 185 countries and regions, the state assets regulator said on Wednesday.
China's state-owned enterprises (SOEs) are spearheading investment in infrastructure projects overseas along the ancient Silk Road land and sea trade routes, part of Beijing's signature Belt and Road initiative.
Firms owned by the central government have co-built 1,676 projects with countries along "the Belt and Road", the state assets regulator said in a handout ahead of a news conference on the sidelines of the 19th Party Congress in Beijing.
SOEs such as shipping conglomerate COSCO and the world's biggest utility State Grid Corp of China have invested heavily in such projects in recent years to deepen China's links with economies throughout Asia and beyond.
"Overseas assets held by State Grid has reached $57.7 billion by now, all of which are profitable," Shu Yinbiao, chairman of State Grid, said at the news conference.
But China has been increasingly scrutinising "irrational" overseas spending by both private and state-owned firms since late last year, which it suspected was one way of disguising capital flight as the yuan currency faltered.
The state assets regulator issued regulatory rules on outbound investments by centrally-controlled state firms early this year, saying it would establish a negative list of investment projects that centrally-controlled state firms would not be allowed to invest in.
NEAR DOUBLING OF ASSETS
Total assets held by China's centrally-owned SOEs are expected to reach 55 trillion yuan ($8.31 trillion) in 2017, nearly doubling over the past five years, state-run China News Service reported on Wednesday, citing the state assets regulator.
China aims to create bigger, stronger state firms and build enterprises capable of competing globally while weeding out excessive capacity in bloated sectors without risking mass layoffs or a blow to economic growth.
"Assets owned by central government companies have exceeded 53 trillion yuan by now," Hao Peng, party chief of the State-owned Assets Supervision and Administration Commission (SASAC), was quoted as saying on the sidelines of congress.
Profits at those firms in the past five years totalled 6.4 trillion yuan, a more than 30 percent jump versus the previous five years, Hao said, according to China News Service.
China will prevent the loss of state assets, deepen reforms of state firms and develop a mixed-ownership economy, President Xi Jinping said at the opening of the twice-a-decade congress.
Xiao Yaqing, head of SASAC, said on Wednesday that SOE restructuring must be market-driven, but added that authorities will try to avoid layoffs.
"We hope there will be more restructuring and less bankruptcy...to have more job relocation and fewer layoffs," Xiao said.
Central government-owned companies have also cut steel capacity by more than 16 million tonnes and coal capacity by more than 58 million tonnes during the past five years, Hao was quoted as saying.
The world's top coal consumer and steel maker has launched a campaign to shut down substandard steel output in its war on pollution and industrial over-capacity.
($1 = 6.6200 Chinese yuan renminbi)
(Reporting by Aizhu Chen and Matthew Miller; Writing by Lusha Zhang and Ryan Woo; Editing by Kim Coghill)
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